Breaking: Senate Passes a 1-Year Extension on Craft Beverage Modernization & Tax Reform Act – Not Done
Distillers and their associations have been working diligently for the last two years to get the Craft Beverage Modernization and Tax Reform Act (CMBTRA) changed from its two year temporary status to permanent. Though the idea of making it permanent was rejected earlier in the week the House and as of today the Senate have passed a one-year extension that will avoid a 400% Federal Excise Tax increase for distillers. The house passed the measure with a 297 to 120 vote while the senate today voted 71 to 23 to support the bill. The tax relief is due to be extended through December 31, 2020.
One More Hurdle to Go – The President’s Signature
The Craft Beverage Modernization and Tax Reform Act was bundled in with HR 1865. The larger bill will be sent to President Trump for approval and is expected to get his signature either today or Friday, December 20, the last day of the current session.
“Craft distillers can take a collective sigh of relief knowing that both the House and Senate have passed a one-year extension of the Craft Beverage Modernization and Tax Reform Act, extending the current tax rates through 2020 and providing much needed stability for these small businesses,” said Chris Swonger President and CEO of Distilled Spirits Council of the United States – DISCUS. “The bill now heads to President Trump’s desk for signature, and with his support, distillers can begin planning for the year ahead. We are grateful to members on both sides of the aisle in both chambers for recognizing the critical importance of this bill and for working hard to pass this extension before the end of the year.”
The one-year extension of the Craft Modernization and Tax Reform Act will give the country’s 2,000 craft spirits producers much-needed tax relief and parity with their counterparts in beer and wine, who have enjoyed a lower tax rate for many years.
“We are one step closer to this critical, temporary tax relief, and we are optimistic that the President will move this legislation through today or at latest, tomorrow,” said Margie A.S. Lehrman, CEO of the American Craft Spirits Association. “Though FET permanence is vital to the long-term success of our industry, and will be a key focus as we move forward in 2020, a short-term solve still greatly helps the 2,000 small distilleries across the U.S.”
FET reform has been ACSA’s top legislative priority, and its extension passage today marks a major victory for the distilled spirits industry, who faced a 400% tax hike come January 1, 2020 without legislation.
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Eric Gregory President of the Kentucky Distillers’ Association stated, “On behalf of the Birthplace of Bourbon, the Kentucky Distillers’ Association and its members are immensely grateful for the steadfast leadership of Leader McConnell in shepherding the extension of the FET rollback and the continuation of the AGED Spirits Act. These measures are vitally important in continuing Kentucky Bourbon’s historic renaissance, which is pouring more than $8.6 billion into the Commonwealth’s economy each year, and is responsible for 20,100 jobs, $1 billion in payroll and $2.3 billion in capital investment. Leader McConnell’s crucial commitment to our signature industry will continue to fuel Kentucky’s economy, which is why the KDA last year recognized his championship with our prestigious “100 Proof” Award. We appreciate and applaud his unwavering support.”